My friend, who is a Malaysian PR, brought me to see a few condos in Iskandar. Most of them are being sold at M$500 (S$200) psf, are freehold in tenure and come with full facilities. The roads are not congested, so driving is a pleasure. The residents said that Iskandar is relative safe, in spite of the reports in Singapore media.

Most of the 2+1 apartments have an area of 1,000 sf and sells for M$500,000 or S$200,000. This is a 2 bedroom apartment with a small room (+1) that is used as a study.

I am impressed with the 3+1 apartment in Danga Bay, which is on the outskirt of Johor Bahru and is 10 mins drive from the causeway. The size is 1,600 sf and it sells for S$400,000. It has 2 keys. One key leads to a 500 sf studio apartment. The other key leads to a 2+1 apartment of 1,100 sf. Both units are inter-connected. The owner can live in 1 unit and rent out the other unit or the grandparents can stay in the adjoining studio unit.

I met a Singaporean at the showroom of the Danga Bay condo. He works as a property agent in Singapore but has bought a unit at Danga Bay. He said that the LRT will connect Danga Bay to the MRT station in Johor Bahru.

If you find a 99 year condos selling for $1,200 sf in the outskirts of Singapore to be too expensive, a property at Iskandar may be an attractive option, especially if your work requires you to travel often outside of Singapore.

Dear Mr.TanToday's news reported that the regulator is curbing the loan limit to35 years with some other restrictions in the approval process. Thisaction came after our MND Minister Khaw commented the 50-year loantenure as a 'gimmick'.

This makes me wonder whether such implementations by Financialinstitutions does need any approval from the regulator? If yes, sadto say this has short lived. What can we learn from here?

In our fast moving society and especially in Singapore, companies andfinancial institutions are forced to be creative and to come up withinnovative products for consumers, be they good or 'bad'.

Our children who have just graduated with 1st class honors or underscholarships or with MBA, may be the ones assigned to approve theseproducts. Due to their lack of experience and the convincing papersput up be these financial institutions, they just approved theproducts.

In the past we have the Lehman Brothers and Minibonds saga, off latewe saw the Profitable Plots, Genneve Gold and now the 35-year loan.

Singapore is well known for her very regulated financial system andsuch processes has resulted in consumers being affected and nowredress need to be action by the the law or legal processes which arecostly for consumers.

What Singapore need is a pool of experts who have retired from theindustry to be in a product approval advisory board. The authoritiescould tap on their views before approving their products. LikeWarren Buffett, people still sought his advise at his age. InSingapore we have a large pool of these experts who through whateverreasons, their views are not sought.

It is no point approving a product and sales made to consumers, thancurb the product. In some instances too many agencies involved egPolice, CPIB, CAD etc before action can be taken.

Friday, October 05, 2012

I wish to encourage motorist to adopt defensive driving. This is defined as follows:

The standard Safe Practices for Motor Vehicle Operations, defines defensive driving as "driving to save lives, time, and money, in spite of the conditions around you and the actions of others."This definition is taken from the National Safety Council's Defensive Driving Course. It is a form of training for motor vehicle drivers that goes beyond mastery of the rules of the road and the basic mechanics of driving. Its aim is to reduce the risk of collision by anticipating dangerous situations, despite adverse conditions or the mistakes of others. This can be achieved through adherence to a variety of general rules, as well as the practice of specific driving techniques.

Mr. Lee send an email to ask me why I am speaking against AXA for their handling of the Ferrari claim and why I am supporting the renewal of the motor insurance for Mr. Tan Yaw Cher's car. He said that, as a consumer, he does not want to pay the claims caused by "reckless driving".

It is easy for people like Mr. Lee to hold this view, until they are placed in the shoes of Mr. Tan. They will then know what it is like to be treated unfairly.

Let me first deal with the Ferrari accident. AXA said that they cover "accident" and do not cover "collision". I am amazed at this explanation. When two cars collide, it is a collision. The collision can be caused by "accident" which is covered or by deliberate intent, which is not covered. I checked AXA's policy and found that they do cover "collision" but they have the right to deny liability if the collision is caused by "willful intent" or "willful negligence".

I do not think that the Ferrari driver had the "willful intent" to cause the collision. It is not clear if the claim could be rejected due to "willful negligence". I did some research on what is "willful negligence" and found some reference about medical malpractice, but could not find any reference to its application on motor insurance.

There is a principle of contract law that if a provision in an insurance contract is unclear, the court will decide against the party that drafted the contract, as it has the duty to make the terms clear. This is called the principle of "contract of adhesion".

I will let the court decide on this matter.

Let me deal with Mr. Tan's case. NTUC Income said that the daughter was driving dangerously. I wondered how they arrive at that conclusion. There was no dispute that she was careless in driving through the red light. but was it just careless, negligence or recklessness?

I had once turn right against a red traffic light. At that time, the light showed green for driving straight but I did not notice the red arrow for turning right. Fortunately, the oncoming traffic stopped in time. While I was careless, I was not reckless. It is quite easy to be confused with so many traffic lights - some of which are meant for pedestrians, especially when driving along an unfamiliar road or at night.

We have to wait for Mr. Tan or her daughter to reply to the accusation of "dangerous driving".

I am quite worried, on behalf of consumers, that some insurance companies appear to be trigger happy in rejecting claims, in spite of their contractual liability.

These two letters reflect the conclusion of my small survey carried out a month ago. Most existing HDB owners do not mind a fall in the property prices. They think about the positive impact for their children.

Thursday, October 04, 2012

Many investors in Malaysia are angry at the action taken by action taken by Bank Negara to close down the operation of a gold trading firm called Geneva. This company also operated in Singapore. Some investors had lodge complaints that the company failed to pay the monthly interest or honor the payback guarantee. One investor filed a suit in court in Singapore and the company did not attend court to respond to the complaint. The Commercial Affairs Department also raided this company.

The investors were promised a monthly payout of 2% of their investment and a full refund at the end of one or three months. How is the company able to earn 24% a year, just to pay the "interest" to the investors? They also have to pay for their marketing and administrative expenses. The investors may think that the money is made from "trading in gold".

Trading is not a safe bet, and any trader can make or lose money on trading. Even investing in gold is not a safe bet, as the price of gold may fluctuate and is volatile. If the company is offering a chance for investors to trade in gold, it is a legitimate business. But the company cannot guarantee the interest payout of 2% a month or a 100% refund of the investment.

When the company makes such a guarantee, it is no longer offering a trading scheme. It is now taking a deposit and paying out a guaranteed rate of interest. This activity becomes "deposit taking". There is a law, in perhaps all countries, that companies that takes deposits should get a licence from the authority. These companies will be closely supervised to ensure that they have sufficient funds to meet their obligations. The law is strict on how the money collected should be invested and be kept accountable.

When a company collects deposits and is not regulated, there is a risk that they can siphon off the money outside of the country and close the company down causing the investors to lose all of their invested sums.

The company will be able to pay the monthly interest and capital refund, if they continue to collect money from new investors to pay off the old investors. So long as the inflow is bigger than the outflow, the operation can continue. But the obligation of the company will continue to grow exponentially. This is, in essence, a Ponzi scheme. See http://en.wikipedia.org/wiki/Ponzi_scheme

The authorities in Malaysia and Singapore faced a dilemma. Should they close their eyes and allow the company to expand their operations? Should they step in and investigate if the company has sufficient funds to meet their obligations? Should they charge the company for collecting deposits without getting a licence?

It is necessary for the authority to act. They should have done so earlier, when the money involved was still quite small. Now, it has grown to be quite a large sum, involving many investors. If nothing is done now, it could become even bigger.

I like the apprenticeship system adopted in Germany. It ensures that young workers develop the skills for their job and reduces job hopping.

This system can also be the solution to find a new job for older workers who have been unemployed. They can join an apprenticeship scheme and have part of the training cost and allowance funded by the Government. This is a modification of the current system adopted by the Government.

Germany

In Germany, there are 342 recognized trades (Ausbildungsberufe) where an apprenticeship can be completed. They include for example doctor's assistant, banker, dispensing optician, plumber or oven builder. The dual system means that apprentices spend about 50-70% of their time in companies and the rest in formal education. Depending on the profession, they may work for three to four days a week in the company and then spend one or two days at a vocational school (Berufsschule). This is usually the case for trade and craftspeople. For other professions, usually which require more theoretical learning, the working and school times take place blockwise e.g. in a 12–18 weeks interval. These Berufsschulen have been part of the education system since the 19th century.Apprenticeships are part of Germany's dual education system, and as such form an integral part of many people's working life. Finding employment without having completed an apprenticeship is almost impossible. For some particular technical university professions, such as food technology, a completed apprenticeship is often recommended; for some, such as marine engineering it may even be mandatory.

In 2001, two thirds of young people aged under 22 began an apprenticeship, and 78% of them completed it, meaning that approximately 51% of all young people under 22 have completed an apprenticeship. One in three companies offered apprenticeships in 2003,in 2004 the government signed a pledge with industrial unions that all companies except very small ones must take on apprentices.

The latent decrease of the German population due to low birth rates is now causing a lack of young people available to start an apprenticeship.

[edit]Apprenticeship after general education

After graduation from school at the age of fifteen to nineteen (depending on type of school), students start an apprenticeship in their chosen professions. Realschule and Gymnasium graduates usually have better chances for being accepted as an apprentice for sophisticated craft professions or apprenticeships in white-collar jobs in finance or administration. An apprenticeship takes between 2.5 and 3.5 years. Originally, at the beginning of the 20th century, less than 1% of German students attended the Gymnasium (the 8-9 year university-preparatory school) to obtain the Abitur graduation which was the only way to university back then. In the 1950 still only 5% of German youngsters entered university and in 1960 only 6% did. Due to the risen social wealth and the increased demand for academic professionals in Germany, about 24% of the youngsters entered college/university in 2000.Of those, who did not enter university many started an apprenticeship. The apprenticeships usually end a person's education by age 18-20, but also older apprentices are accepted by the employers under certain conditions. This is frequently the case for immigrants from countries without a compatible professional training system.

Wednesday, October 03, 2012

Do you know what is the interest rate charged to you on an installment plan for consumer goods, e.g. a laptop or television? This articles shows how to calculate the effective interest rate, and also indicates the interest rate charged by a large household appliance store.
http://tankinlian.com/admin/file.aspx?id=683&IID=687

Tuesday, October 02, 2012

I have advised consumers to invest in the STI ETF. This is an index fund that is invested in the top 30 shares in Singapore. It is well diversified and is relatively safe for long term investors. It should give an attractive yield compared to bonds and term deposits.

Currently, MAS regulations do not allow ordinary investors to invest in ETF, as it is classified as a complex products. Investors in this ETF has to be knowledgeable and to pass a test. Most investors find this requirement to be a big hurdle and hassle.

There was an announcement earlier that MAS would reclassify the STI ETF to remove the need to pass the test. There seem to be a delay in this re-classification. Investors have to wait a while longer.

As an alternative, investors can invest in the high yielding blue chip shares, such as Singapore Press Holdings, Singapore Telecoms and Starhub or other blue chips that offer a yield that is better than 3%. Do invest in as many shares as possible, to enjoy the benefit of diversification. More details can be found here:

Monday, October 01, 2012

I have been using the Motorola Android phone for two years. Later, I moved to the Samsung Note for two months. I am now using the Windows Phone 7 from LG. I bought it for development of mobile games two years ago.

I find the Windows Phone to be better than the Motorola in several aspects. It is fast to respond and the software is excellent. I am surprised that the Windows Phone 7 did not sell well, in spite of its excellent features. I hope that Windows Phone 8 will do much better.

Sunday, September 30, 2012

A friend asked me, "What are your views about the Ng Boon Gay's case. It is now quite confusing and does not seem to be a corruption case. Why is Ng being charged on this score? The matter is getting to be quite ridiculous."

I replied that this is typical of the Singapore system. No one wants to take the responsibility to make a judgment on the merits of the issue. They just follow orders or interpret the book strictly.

Mr KL Tan,

Reading your 'Property Preview' in today's TST FORUM, I felt compelled to join your Facebook because I share sentiments akin to yours to highlight any injustices or unfair treatments that are existing & ongoing targeting towards innocent good consumers who don't, can't or unable to rebut the culprits. In fact, frankly speaking, Singapore services in general is getting from worse to worst unless voices like you dare to speak out without fear or favor.